"PAYING with plastic" is a modern phenomenon with more and more people using credit and debit cards every day. Now it's official -- cards are overtaking cash. Frank Elson investigates.

CASH is on the way out and is due to be overtaken by "plastic" methods of payment within the next 12 months. Bolton businesses are not at all surprised by the news, with card transactions at one store doubling those of cash.

Plastic payments at the Ready Made Curtains and Bedding Centre in Oxford Street far exceed the national average of around 50 per cent.

Manageress Alison Hall said that "twice as much" is spent using plastic than cash. "The majority of that is in debit cards rather than credit cards," she said.

Sales assistant Rita Wood added: "It's cheques that have really gone. They've disappeared. I can't remember the last time we had one."

Ian Miller, who owns the bags and luggage stall in the Market Hall, has seen a huge increase in the use of plastic cards in recent years.

"About half our business at least is through plastic," he said. "The high range handbags and luggage are almost exclusively paid for with plastic now, although few people use it for purchases of less than five pounds. Ten years ago, hardly anyone paid with a credit card."

Hilary Ann has sold ladies fashions in Bolton for 40 years and has witnessed a "huge" difference in payments over those years.

"Plastic accounts for easily 80 per cent of our business these days," she said. "The changeover has been very noticeable in the last four or five years.

"When I started out it was mainly cash, with a few personal cheques and some 'club' cheques, but we see very few cheques now."

According to the banking industry organisation, the Association for Payment Clearing Services (APACS), credit and debit card payments in 2004 will reach £269 billion, as against £268 billion spent in "real" money.

These figures are based on the 246 plastic card transactions made ever second in this country.

APACS says that without credit cards the UK would virtually grind to a halt as the 160 million cards in use -- equivalent to around 3.5 cards per adult -- were used to spend £244 billion in 2003.

With two thirds of those transactions made with debit cards, the industry is touchy at what it calls the "demonising" of plastic cards being blamed for the huge rise in ballooning debt.

In terms of total transactions, cash will always remain in use for low value payments. One reason for the increase in use of plastic is said to be the result of the rise in e-commerce.

Last year, more than 18 million people bought goods or services online -- up 50 per cent on 2002 and exclusively paid for with plastic cards.

Credit cards accounted for 69 per cent of those transactions, with debit cards the remainder of the 200 million transactions.

2003 also marked the first reduction in credit card fraud for eight years, as fraud losses fell by five per cent to £402 million.

This fall, said by APACS to be the result of industry-wide efforts, is expected to accelerate over the next 12 months with the introduction of the new generation "Chip and Pin" cards.

By the end of this year, most people making face-to-face purchases will have to type in a four-digit PIN number into keypads at tills instead of signing a receipt. Ian Miller, however, is not so sure about this new initiative.

"One old lady said that she would be OK with the new system as she had the number written down and kept it in her purse. That is hardly what I would call secure," he said.

Hilary Ann, on the other hand, feels that carrying plastic rather than cash on a shopping trip is safer: "People don't want to carry a lot of cash about these days," she said.

Judging by the figures, they no longer are.

CREDIT CARDS - THEY'RE HISTORY!

CREDIT was first used in Assyria, Babylon and Egypt 3000 years ago.

The "bill of exchange", the forerunner of the banknote, was established in the 14th century.

Paper money first appeared in the 17th century.

The first advertisement for credit was placed in 1930 by Christopher Thornton, who offered furniture that could be paid for weekly.

From the 18th century until the early part of the 20th century, "tallymen" sold clothes in the UK in return for a weekly payment.

In 1920, a "buy now, pay later" system was introduced by many shops in the USA. Shoppers had a "selling plate" which could only be used in the store where it had been issued.

In 1950, Diners Club and American Express launched charge cards in the USA, the first "plastic" money.

In 1951, Diners Club issued the first credit card to 200 customers who could use it at 27 restaurants in New York.